Changes to Testamentary Trusts—The New Rules Are Here

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Changes to Testamentary Trusts—The New Rules Are Here

Terry Soloman, CPA, CA, TEP, Partner, MRSB Group, Charlottetown, PEI, DFK Affiliate Firm

Much has been written on the legislative changes to testamentary trusts, which were originally announced in 2014. These revised rules became effective January 1, 2016. Although beyond the scope of this article, generally, preferential tax treatment that had previously existed has been restricted or removed for certain testamentary trusts. Under the new rules, many of the tax benefits have been restricted to “graduated rate estates.”

The following questions may help you determine if these new rules may impact your estate planning:

If the answer to any of the above questions is yes, it may be prudent to review the potential impact of these new rules on your estate plan with your accountant to ensure there are no unanticipated consequences of the new rules.

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